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The digital marketing glossary > T > What is Traffic arbitrage definition?

What is Traffic arbitrage definition ?

Traffic arbitrage is buying and selling paid traffic for a profit. The principle is to buy good traffic at low cost and to turn it on a website into outcoming paid traffic. If you pay $10 for 1000 visitors and get 100 clicks for an average value of 12 cents, you make a 20% margin.

Potential paid traffic sources are numerous:
- PPC banners
- PPC text ads from main or 2 tier search engines
- email lists
- PTC sites
- ...

When traffic traders buy traffic on PPC platforms, they often buy long tail keywords which are less expensive.

Traffic may then be recycled in paid clicks or paid traffic through monetization programs like AdSense or affiliate programs. In some cases, the traffic trader doesn’t even need to have a site.

Traffic arbitrage heyday has passed for different reasons:
- marketers and agencies are more educated and opportunities become rare
- MFA sites are constrained by quality score on AdWords platform
- digital marketing is more and more algorithmic
- buyers of click are more demanding for conversions

Traffic arbitrage is less accessible to individuals but it can still be used by agencies or marketing platforms which master programmatic buying.

AdSense arbitrage, PPC affiliate marketing and trademark poaching are particular kinds of traffic arbitrage.

 
Published on Tuesday 19 March 2013 (Authors)